Private sale of property
In a private sale of property, the:
•property is advertised and prospective buyers are invited to make offers
•you and the buyer agree on a sale price through negotiation, usually with assistance from an estate agent
•the contract can be conditional. If you agree, the buyer can make the sale subject to obtaining a loan, a satisfactory building inspection report, or other conditions.
For residential and small rural properties, the buyer has three business days to change their mind. This is called ‘cooling off’ and is not possible in some circumstances. For more information view the cooling off on a property sale information below.
Considering offers for your property
Do not accept a lower offer for the sake of a quick sale unless you are completely satisfied and willing to sell at that price.
A buyer may make an offer verbally or in writing. A written offer will be in the contract of sale, which you will also sign if you accept the offer.
A buyer can withdraw their offer at any time before you accept it.
If an agent is managing the sale, offers will:
•be made through your agent
•generally be in writing using the contract of sale
•usually be accompanied by a full or part deposit, depending on the terms of the contract. There are no laws about the amount of deposit but it is usually 10 per cent of the purchase price. This deposit will be returned to the buyer if you do not accept the offer.
If an agent is not managing the sale, the buyer makes their offer directly to you, and you manage negotiations with prospective buyers.
A buyer can write into the contract a date by which their offer will lapse.
In a private sale, you can agree to make the sale subject to conditions, such as:
•the buyer obtaining a loan (‘subject to finance’)
•the sale of an existing property
•the successful completion of a building or other condition inspection.
If the contract is subject to obtaining a loan, the buyer should always nominate a lender in the relevant section of the contract.
The buyer cannot place conditions on a sale at auction.
Negotiating private sale of property
Through negotiation, the agent will attempt to achieve a mutually acceptable price. This negotiation may involve:
•verbal offers, which must be followed-up in writing
•more than one person making an offer. The agent will negotiate between parties to obtain the highest price for you
•the settlement period. This is usually between 30 and 90 days but you can negotiate an alternative with the buyer
•agreeing on the items that will be included or excluded from the sale; for example, a dishwasher.
Make sure the contract of sale lists the items that are part of the sale (there is a space for this in the contract.) If not, it may be difficult to determine ownership of those items at settlement.
When is the property sold in a private sale?
An offer by a buyer becomes binding when you accept it by signing the contract of sale.
The property is sold when both you and the buyer have signed the contract of sale.
All parties who sign the contract must be given a copy.
The sale is finalised at settlement when all checks have been made, the title and transfer documents exchanged, and the balance of the purchase price paid.
Contract of sale for the private sale of property
A contract of sale contains:
•details of the property
•your name and the buyer’s name
•the name of the your estate agent, if you are using one
•details of legal practitioners or conveyancers that you and the buyer have engaged
•the deposit paid
•the balance owing at settlement
•any special conditions such as ‘subject to finance’.
An agent can complete the details on a contract in preparation for you and the buyer to sign.
Cooling off on a property sale
A buyer has a cooling-off period of three clear business days for non-auctioned residential and small rural property sales, regardless of price.
The cooling-off period gives the buyer time to consider their offer. It begins from the date the buyer signs the contract, not from the date that you sign it.
To cool off, a buyer must give written notice to you or your agent. The buyer will be entitled to a full refund of money paid, less $100 or 0.2 per cent of the purchase price, whichever is greater.
The cooling-off period does not apply when the buyer:
•received independent advice from a solicitor prior to signing the contract
•previously signed a contract for the same property with the same terms
•is an estate agent or corporate body.
A cooling-off period also does not apply when the property is:
•purchased within three clear business days before or after a public auction
•used mainly for industrial or commercial purposes
•more than 20 hectares and used mainly for farming.